Bubs in China

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This year of Covid keeps throwing up more and more strange contradictions. With all of us stressing about the Australia-China relationship and worrying about economic coercion, decoupling and trade disputes, recently listed Bubs Australia has, according to Food and Drinks Business, “completed a share placement, raising $28.3 million to go towards its expansion into China. The institutional placement was heavily oversubscribed, with shares priced at $0.80 per share. Bubs said several new institutional and sophisticated investors from Australia and overseas joined existing institutional shareholders in the placement. Bubs founder and CEO Kristy Carr said the company’s first priority will be to progress its strategy to accelerate SAMR registration for China manufacture of Bubs Goat Infant Formula made from 100% Australian goat milk”.

Describing themselves as “Australia’s only vertically integrated producer of goat milk formula, with exclusive milk supply from Australia’s largest milking goat herd and a sustainable supply of locally sourced fresh goat milk from Australia’s largest herd of milking goats”, Bubs look to me like the type of specialist supplier in a deep and vertical niche that should do very well in China, not forgetting their potential within the Asian region as a whole.

Many of my friends in the Australian wealth management sector remember me suggesting that they take a look at Blackmore’s shares during a presentation on China’s Five Year Plan at a national roadshow hosted by Colonial First State in 2011. So, at 80 cents, I’d be tempted to start researching Bubs Australia.

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